The age of digitalization has resulted in an incredible sea change in how society views money. The gambling industry is not immune from this transformation. In recent years, there has been a shift with players opting for comfort, convenience and variety, rather than utilizing the services of traditional land-based casinos. However, innovation looks like it has no intention of stopping – with gambling operators looking to benefit from the sudden growth of cryptocurrency. The future of online gambling has never looked brighter, with players and online casinos simultaneously taking full advantage of the framework that digital currencies such as Bitcoin and Ethereum can offer. This article, provided by the crypto casino experts of eth.casino, takes a closer look at the tremendous opportunities blockchain technology has to offer to the gambling industry.

Bitcoin – first across the line

The first, and still the most popular cryptocurrency in terms of usage, market capitalization and business adoption, is Bitcoin. Bitcoin was released in 2009, and allows users to trade digital currency without requiring a third party to facilitate and manage transactions. This is because of Bitcoins cryptographic framework, which provides the online community with the capacity to validate payments by solving algorithmic problems, rather than relying on a financial institution or payment processor. As a result, Bitcoin transactions are practically immune from malpractice, and fees are a fraction of those charged by conventional money transmitters. Moreover, each and every transaction is available to view on the Bitcoin blockchain, offering the community public transparency.

Bitcoin’s success has spurned a plethora of alternative digital currencies to enter the market, with many offering their own unique selling point. Ethereum is its nearest competitor, with its cryptographic blockchain building on Bitcoin’s limitations, and as such, is able to offer smart contracts in a range of industries.

Bitcoin’s impact on the online gambling industry

Online gambling operators are at a constant tug-of-war between commercial viability and the various regulatory conditions that they must adhere to. This is due to the issues surround anti-money laundering and fraud. As a result, players are often expected to provide sensitive documents such as a government issued ID, proof of address, and even copies of debit/credit cards. Furthermore, because regulations require the gambling operator to perform enhanced identity checks on new and existent players, customers will often have to wait days, even weeks, for their withdrawals to be processed. However, as Bitcoin is not categorized as fiat currency by governmental agencies, online casinos can now bypass many of these burdens, subsequently improving the player experience. Bitcoin created a significant opportunity for the gambling industry, as they would no longer need to spend valuable resources on draconian red-tape. This has allowed players to create a new account instantaneously, fund it securely, and withdraw their funds hassle-free. Cryptocurrency has also substantially reduced the fees associated with debit/credit card deposits, and allowed online casinos to pass these savings on to their customers.

The future of online gambling – Ethereum smart contracts

Ethereum joined the cryptocurrency phenomenon relatively late, going live in 2015. The purpose of Ethereum was to build on Bitcoin’s framework, however it wanted to offer more than just currency. As such, users can now transact in a range of sectors, such as real estate contracts, insurance compensation, and of course – online gambling. These principles, known as a smart contract, are similar to Bitcoin’s peer-to-peer technology, insofar that transactions do not require the services of central authority or third-party. Instead, its cryptographic framework can algorithmically confirm, validate and audit a movement of assets – transparently, securely, and in a timely fashion. To illustrate what an Ethereum smart contract can do for the online gambling industry, a case example would be online slots. A casino lives or dies by its ability to earn trust, and tales of traditional fiat operators shutting down with player funds darken the industry’s reputation. However, smart contracts allow users to publicly verify that the slot game’s historical data is fair and true. This is because it is literally impossible for an online casino to alter or change the displayed pay-out ratio, as this process is cryptographically secure.

However, the benefits do not stop there. In laymen terms, an Ethereum smart contract runs on a pre-defined ‘if/then’ code. For example, if a roulette player gambles with Ethereum on red (the ‘if’), and the roulette wheel subsequently lands on red, then the smart contract is programmed to automatically return the winnings to the player’s private wallet (the ‘then’). This principle could be applied to absolutely anything in the online gambling sector, from fixed-odds sports, peer-to-peer wagering, to heads or tails. An online casino that can operate in an automated, transparent and secure manner has the ability to earn instant credibility from the gambling community. It is therefore no surprise that new and existing casino organisations are concentrating their efforts on smart contract gambling, with Ethereum becoming the blockchain of choice.

With online gambling representing a thriving industry and worth a reported $46 billion, it is foreseeable that the clear advantages that smart contracts offer online gamblers will mean that Casino DApps (Decentralized Applications) will become the preferred way of gambling in future. However, we are still in the early stages of adoption, so whilst gambling with Bitcoin remains the ‘conventional’ choice at the moment, it is expected that Ethereum-based smart contract casinos will catch up very soon.

To navigate gambling enthusiasts through the Wild West of crypto casino land, eth.casino provides all the information needed to get your feet wet with decentralized gambling. Apart from in-depth articles and guides, eth.casino offers curated lists of crypto casinos that can be considered industry leaders. While the market is still relatively small compared to traditional online casinos that offer fiat currency transactions, the level of professionalism, quality, and innovation is rising at an increasing pace.